BRITISH BROADCASTING CORPORATION (BBC)
A picture of the National Audit Office logoDEPARTMENTAL OVERVIEW 2019BRITISH BROADCASTINGCORPORATION (BBC)NOVEMBER 2019If you are reading this document with a screen reader you may wish to use the bookmarks option to navigate through the parts. If you require any of the graphicsin another format, we can provide this on request. Please email us at www.nao.org.uk/contact-us
This overview summarises the work of the BBC including what it does,how much it spends, recent and planned changes, andwhat to look out for across its main business areas and services.BRITISH BROADCASTING CORPORATION(BBC)Bookmarks and ContentsOverviewAbout the BBC.How the BBC is structured.How the BBC Group generated its income in 2018-19.CONTENTSWhere the BBCPublic Service spends its money.Recent major developments.Financial performance.Public use of key BBC services.3ERVIEWPart [01] – Licence fee and concessions from OVgovernment.Licence fee and concessionsAbout the BBCp a g e from government–continued.Analysis of licence fee concessions.How the BBC is structured–Part [02] – Commercial and competitive environment.Commercial and competitive environment continued. H ow theRecent commercial deals and–investments.10PA R T [ 01]– L icence fee and concessionsfrom government12PA R T [ 0 2 ]– Commercial andcompetitive environment14PA R T [ 0 3 ]– T he BBC’s engagement withpersonal service companies (PSCs)pagepage15PA R T [ 0 4]– Managing the BBC’s pay-bill16PA R T [ 0 5 ]– Renewing the EastEnders setBBC Group generated its incomein 2018-19Part [03] – The BBC’s engagement with personal service companies (PSCs).Part [04] – Managing the BBC’s pay-bill.– W here the BBC Public Service spendsits moneyPart [05] – The E20 project.Renewing the EastEnders set.– Major developmentsPart [06] – What to look out for.page– Financial performancepage– Use of key BBC servicespageThe National Audit Office (NAO) helps Parliament hold government to account for the way itspends public money. It is independent of government and the civil service. The Comptroller andAuditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO.The C&AG certifies the accounts of all government departments and many other public sectorbodies. He has statutory authority to examine and report to Parliament on whether government isdelivering value for money on behalf of the public, concluding on whether resources have beenused efficiently, effectively and with economy. The NAO identifies ways that government can makebetter use of public money to improve people’s lives. It measures this impact annually. In 2018 theNAO’s work led to a positive financial impact through reduced costs, improved service delivery,or other benefits to citizens, of 539 million.Design & Production by NAO External Relations – DP Ref: 007895-001If you would like to know more about the NAO’s work on the BBC, please contact:Lewis KnightsDirector, BBC Financial Auditlewis.knights@nao.org.uk020 7798 7977Louise BladenDirector, BBC Value for Moneylouise.bladen@nao.org.uk020 7798 7587If you are interested in the NAO’s work and support forParliament more widely, please contact:parliament@nao.org.uk020 7798 7665 National Audit Office 2019
D E PA R T M E N TA L O V E R V I E W 2 019 [ B B C ]OVERVIEW– Aboutthe BBCIntroductionPublic purposesThe British Broadcasting Corporation (BBC) is the United Kingdom’s (UK’s) main public service broadcaster. It is principallyfunded by the television licence fee and its constitutional basis is a Royal Charter, which establishes its independence, primarymission and public purposes. Its mission is to act in the public interest, serving all audiences through the provision of impartial,high-quality and distinctive output and services which inform, educate and entertain. The BBC is a public corporation of theDepartment for Digital, Culture, Media & Sport.The current Royal Charter, which was introduced in 2017, setsout the BBC’s five public purposes.Key fact s9pan-UK TV services56radio stations10 pan-UK6 national40 local, acrossEngland and theChannel Islands91%of adults use BBCservices each weekBBC World Servicehas a weekly reach of319 millionpeople3.6 billionprogrammes wererequested on iPlayerin 2018Alongside the BBC Public Service, the Royal Charter permits the BBC to undertake commercial activities, provided they fit theBBC’s mission and public purposes; are not funded through licence fee income; and are undertaken with a view to generatinga profit.BBC es studios andpost‑production services tomajor TV broadcasters andproduction companies.Show the most creative, highest quality anddistinctive output and services.Reflect, represent and serve the diversecommunities of all the United Kingdom’s nationsand regions and, in doing so, support the creativeeconomy across the United Kingdom.BBC Commercial Holdings LimitedFunds, creates, distributes andcommercialises content for the BBCand other companies, both in theUK and internationally.Support learning for people of all ages.3Commercial activitiesBBC StudiosDefenceInfrastructureOrganisationProvide impartial news and information to helppeople understand and engage with the worldaround them.BBC s the TV channel BBCWorld News and bbc.com, fundedby advertising, sponsorship andincome from pay TV operatorswho show the channel.Reflect the United Kingdom, its culture andvalues to the world.
D E PA R T M E N TA L O V E R V I E W 2 019 [ B B C ]OVERVIEW– Howthe BBC is structuredThe BBC Public Service is the largest element of the BBC Group and generates the most revenue, through the licence fee (as set out on the next page).BBC Public ServiceBBC Commercial Holdings Ltd1BBC StudiosDefence Infrastructure OrganisationNewsand ationDivision of Public ServiceRecent structural changesIn April 2017, the BBC established BBC Studios Ltd(content production) as a commercial subsidiary, representinga significant development in the BBC’s commercial activities.BBC StudioworksDefenceInfrastructureOrganisationBBC Children’sDefenceProductions 2InfrastructureOrganisationCorporateservices 3Parent/subsidiary relationshipNotes1 BBC Commercial Holdings holds the debt facilities on behalf of all theBBC’s commercial activities and lends funds from these facilities tosubsidiaries at a commercial rate. It is through this company that thecommercial subsidiaries make dividend payments to the BBC.BBC Global NewsDefenceHoldings LtdInfrastructureOrganisation24BBC nBBC onParent to sixDefencesubsidiaries 2InfrastructureOrganisationParent to 90DefencesubsidiariesInfrastructureOrganisationBBC Children’s Productions, and the six subsidiaries of BBC StudiosProductions, are special purpose vehicles enabling the BBC to accesstax credits from the UK government for the production of high-qualityprogrammes. BBC Children’s Productions is not a subsidiary of BBCStudios as the production of children’s programming, as a genre,remains within the BBC’s public service.Subsequently, in November 2017, the BBC decided tomerge the activities of BBC Studios Ltd and BBC Worldwide(sales and distribution) under a single entity, ‘BBC StudiosLtd’ (BBC Studios), which integrated programme production,sales and distribution, and began trading in April 2018.Parent to 3The corporate functions used to sit within the former DDG Group.The Deputy Director General (Anne Bulford) departed from the BBC in2019, at which point the division was no longer labelled the DDG Group.The BBC will not be replacing the role of the DDG, instead they haveappointed Bob Shennan as Group Managing Director. The functions ofthe division remain the same but they now follow different reporting lines.Here and throughout, ‘BBC Studios’ refers to the companycreated in April 2018. BBC Studios Productions andBBC Studios Distribution refer to its subsidiaries.
D E PA R T M E N TA L O V E R V I E W 2 019 [ B B C ]OVERVIEW– Howthe BBC Group generated its income in 2018-19The BBC Public Service generates themost revenue through the licence fee asshown below.The BBC Group generated a total incomeof 4,889 million in 2018-19, in comparisonto 5,062 million in 2017‑18 – a decreaseof 3.4%.The revenues generated by the commercialentities include both third-party sales andsales between BBC entities. Of theserevenues, sales between BBC entities in2018-19 are 500 million – this is excludedfrom total Group Revenue.BBC Studios generated a share of revenuefrom joint ventures of 184 million. This isalso excluded from total BBC Group revenue.Instead, a 36 million ‘share of profits fromassociates and joint ventures’ is included inthe Group income statement to account forthese operations.BBC Group revenue generated by BBC entitiesThe BBC Public Service generates the most revenue through the licence feeEntityBBC Public Service4,017BBC Studios1,189BBC Global News184114BBC Studioworks37Other commercial entities532Sales between BBC 03,5004,000Revenue ( m)BBC Group subsidiariesA line graph showing that the BBC Public Service generates the most revenue through the licence feeShare of revenue from joint venturesSales between BBC entitiesSource: National Audit Office anaysis of BBC data 5,573 million 500 million 184 million 4,889 millionsum of all revenuessales between BBC entitiesjoint venture revenuetotal BBC Group Revenue4,500
D E PA R T M E N TA L O V E R V I E W 2 019 [ B B C ]OVERVIEW– Wherethe BBC Public Ser vice spends its moneyThe management of the BBC’s resources must be in keeping with the Royal Charter, and the BBC must notcross‑subsidise its commercial activities using the licence fee or grant-funded activities. Public Service transactionsmust meet the intended purposes of the BBC, and prices charged for services provided between the Public Serviceand commercial activities are determined on an arm’s-length basis.55.2%17.3%9.9%6.4%Category8.6%2017-182.6% 6.92Television 6.40 2.17Radio 2.06 1.24BBC World Service 1.06 0.80Other services andproduction costs 0.67 1.08BBC Online 0.91 0.33Licence fee collectionand other costs 1.152018-19 12.54Percentage of 12.54monthly household fee52.2%The table demonstrates how mucheach household is paying for differentBBC services and associated costs.In 2018-19, 5p in every 1 was spentdistributing BBC services to audiences,and the cost of collecting the licencefee was 2.5p per 1 collected.Monthly spend per licence fee2018-19Licence fee expenditure by ser vice,2 017-18 and 2 018-1916.8%8.7%5.5%7.4%The percentage of the monthlyhousehold licence fee that went onlicence fee collection and other costsreduced from 9.4% in 2017-18, to 2.6%in 2018-19, as the BBC’s overheads fellto around 5% of total costs, pensioncosts were reallocated into core spendand the BBC’s broadband contributionobligations have reduced. The overheadsrepresent the costs of running theorganisation, whereas the remaining95% is controllable spend, focused oncontent and delivery.All other areas of BBC spend haveincreased in terms of the percentage ofthe monthly household licence fee.9.4% 12.252017-18Percentage of 12.25monthly household feeHere we show a table ofMonthly spend per licence fee6
D E PA R T M E N TA L O V E R V I E W 2 019 [ B B C ]OVERVIEWRoyal Char terThe current BBC Royal Charter gained Royal Assent inDecember 2016 and came into force on 1 January 2017,lasting for 11 years. The Charter introduced a number ofchanges to BBC governance and operations that are nowbeing implemented.The Department for Digital, Culture, Media & Sport will carryout a mid‑term review of the Charter, focusing on governanceand regulatory arrangements. This review is not a full CharterReview and so will not look at the BBC’s mission, purpose orthe method by which it is funded.The National Audit Office (NAO) has a strongerrole in scrutinising how the BBC spends its money.For the first time the NAO has access to the BBC’scommercial activities for the purposes of audit(both financial audit and value-for-money studies).Ofcom has become the external,independent regulator of the BBC.GovernanceThe Royal Charter introduced the new Unitary Boardresponsible for ensuring that the BBC’s strategy, activity andoutput are in the public interest – replacing the external BBCTrust and internal BBC Executive. The Commercial HoldingsBoard is responsible for ensuring that the commercialsubsidiaries deliver against the agreed strategy. This boardmust include a non‑executive director from the main BBCBoard as chair, and one non‑executive director that is not amember of the main BBC Board.The BBC will lose the money from thegovernment that funds free licences for over-75s.In return it will receive other financial gains.Programme making has been openedto greater competition.2 017 BBCRoyal Char terandAgreementThe BBC is required to give greaterfocus to under-served audiences.The BBC issued 4.47 million free licences to those agedover 75 in 2018-19, with a value of 672 million. The BBCissued 3% more licences to over-75s in 2018-19 than2017‑18, compared with a 0.7% decrease in paid licences.The licence fee as a method of funding the BBC PublicService is continuing for at least 11 years, and willincrease annually in line with inflation until 2021-22.Viewing habit sLicence fee for over-75sUntil 31 March 2018 the BBC received grant funding to coverthe full cost of the over-75s TV licence concession from theDepartment for Work & Pensions (DWP). This funding isbeing phased out over three years, with the BBC taking onfull responsibility for any concession from 2020-21.All employees and freelancers whoare paid more than 150,000 byBBC Public Service are named in theannual report (this excludes those incommercial subsidiaries).In 2018-19 DWP funding for this concession was cappedat 468 million. The BBC received 204 million less than itwould have done when the concession was fully funded bythe government.In June 2019, the BBC announced that from June 2020,a free TV licence will only be available to a household withsomeone aged over 75 who receives pension credit. The BBCcarried out a consultation, receiving more than 190,000responses, asking for a view on a range of options. The newscheme will cost the BBC around 250 million by 2021-22,depending on the take-up. The impact of removing freelicences for the over‑75s who will have to pay for their licencesin future has been the subject of significant media interest.The media sector is changing rapidly because of technologicaldevelopments, new competition and shifting consumerbehaviour. Audiences, particularly younger generations, areshifting away from live programmes towards on-demand andonline content. Similar shifts are seen in the audio market.Traditional broadcasters, such as the BBC, are facingincreasing competition from online providers. The BBC hasreferred to the need to “ride two horses”: to serve both thosewho are watching and listening on traditional channels, andalso those who have adopted the internet as their primarymedium. The BBC and other UK broadcasters also need toadapt to ensure that their content continues to appeal, andthat it is available where and when audiences want it.7
D E PA R T M E N TA L O V E R V I E W 2 019 [ B B C ]OVERVIEW– Financialper formanceThe BBC made a deficit in 2018-19 of 69 million (compared with a profit of 180 million in 2017‑18). Factorswhich contributed to the deficit in-year include:The BBC had a netdeficit of 69 millionin 2018-19The BBCdrew down onits cash reserves,reducing theBBC Group cashbalance68% earningsgrowth incommercialsubsidiariesThe BBC Groupaccounts 2018‑19give a true andfair viewThe C&AGqualified his opinionon regularity a decrease in licence fee income by 4% ( 140 million). The BBC received 204 million less than it wouldhave if the over-75 licence fee concession was fully funded by government. This was partially offset by theincrease in the licence fee from 147 to 150.50 (increase in line with inflation); the cyclical impact of major sporting events, such as the FIFA World Cup and the Commonwealth Games; the cost of launching BBC Sounds; and the cost of launching the BBC Scotland Channel.The most recent actuarial valuation of the pension scheme showed a fundingshortfall of 1,769 million at 1 April 2016. There is a deficit on the pension schemeof 522 million, and the BBC has agreed a recovery plan with the scheme Trustees toreduce this deficit over 11 years, with expected payments totalling up to 195 millionper year up until 2028. In addition, BBC contributions to pension schemes increasedthis year from 16.7% to 31.4%.The BBC managed the deficit by drawing down on its cash reserves in the year, reducing its cash balance by 55 million (from 523 million to 468 million).8A dividend of 73 million (2018: 38 million) was declared by BBC Commercial Holdings to theBBC Group.Revenue growth and cost control in the commercial subsidiaries have enabled the commercialbusinesses to deliver a year-on-year EBITDA (earnings before interest, tax, depreciation andamortisation) growth of 68%.The BBC Group accounts 2018-19 give a true and fair view of the state of the BBC Group’s affairs and of its deficit for the year; and the accounts have been properly prepared in accordance with therelevant accounting standards.For spend to be regular, the management of all of the BBC’s resources must accord with theprovisions of the Royal Charter, Framework Agreement and other agreements the BBC enters intowith government.The Comptroller and Auditor General (C&AG) qualified his audit opinion on regularity in relationto the recognition of a 12 million provision in the BBC’s accounts. The provision is for settlingretrospective claims that HM Revenue & Customs (HMRC) may have against presenters engagedby the BBC in respect of any misclassification of their employment status and therefore historicincorrect tax payment. The provision was deemed an acceptable cost to the licence fee by the BBCBoard. However, the BBC is not legally responsible for any tax underpayment by these presenters.The provision was estimated by looking at individuals affected and then applying assumptions,based on conversations with HMRC; recent tax tribunal rulings; and the advice of external advisers.See the section on personal service companies on page 14 for more details.
2017/18: 60.4%2017/18: 50.8%2Source: BARB (TV-owning households), 15 minutes’ consecutive reach.* Include SVOD, gaming, DVDs.D E PA R T M E N TA L O V E R V I E W 2 019 [ B B C ]OVERVIEW– Use2017/18: 53.2%Weekly reach of BBC Television andRadioRadiocompared withservices/music streamingother providersof key BBC ser vicesWeekly reachTelevision setAll BBC RadioAll commercialradioMusic streaming62.4%65.4%WeeklyreachAll BBC TelevisionAll ITVthetelevisionAll Channel4All ChannelOtheroverallbroadcastuseOtheruses of the25.0%The time people spend with the BBC is trending downward year-on-year for bothBBCTV and BBC Radio.Nevertheless,BBC is stillthe mediaproviderthat5 UKadultsthemost.televisiontelevisionTV channelsTV set*Adults aged 15 Young adults 15-34Number of TV licences issued, including over-75 free licences,2013-14 to 2018-19Sales volumes for 2018-19 were 0.14% below 2017-18Volume (000)26,00025,750The BBC has seen a decline in thenumber of TV licences issued, resultingin revenue growth that was less thanthe BBC -142014-1577.9%Music62.4%2017/18: 64.2%25,47825,000Television2015-162016-17Financial yearSource: BBC Trust Statement 2018-192017-182018-19 saw the steepest year-on-year decline in theamount of broadcast TV watched by under-35s on theTV set – down around two hours per week in a year to10.5 hours. By contrast, the time this a
The British Broadcasting Corporation (BBC) is the United Kingdom’s (UK’s) main public service broadcaster. It is principally funded by the television licence fee and its constitutional basis is a Royal Charter, which establishes its independence, primary mission and public purposes. Its mission is to act in the public interest, serving all audiences through the provision of impartial, high .
BROADCASTING CORPORATION THIS DEED is made the 7 November 2016 BETWEEN: HER MAJESTY’S SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT (“the Secretary of State”) and THE BRITISH BROADCASTING CORPORATION whose chief office is at Broadcasting House, Portland Place, London W1A 1AA (“the BBC”). BACKGROUND (1) The BBC was first incorporated, for a limited period of time, by a Royal Charter .
broadcasting to minority language development what role does Scottish Government see for Gaelic in public service broadcasting? The Chairman welcomed Margaret Mary Murray, BBC ALBA, and Donald Campbell, MG ALBA, to address the conference. 5 R eport from Gaelic Broadcasting Conference, Edinburgh, 15 March 2016 Donald Campbell MG ALBA and BBC ALBA were delighted to hear people’s views. MG ALBA .
BBC Trust Mystery Shopping Research 2013 2 1. Executive Summary This Executive Summary presents the headline findings from mystery shopping research conducted by ICM on behalf of the BBC Trust between June and September 2013. The BBC Trust commissioned ICM to conduct mystery shopping of stage 1a and 1b of the BBC's complaints procedures.
4 Industry Attitudes towards Multicultural Broadcasting 43 4.1 What is Multicultural Broadcasting? 43 4.2 Multicultural Broadcasting Now 51 4.3 The Issue of Programme Genre 61 4.4 Multiculturalism:Guidelines and Policies 68 4.5 Employment and Multiculturalism 74 4.6 The Future of Multicultural Broadcasting: Industry Views 86
broadcasting standards today; questions which the BBC had not investigated systematically for some time. The BBC Trust asked the Executive to consider how the BBC should deal with questions of generally accepted standards in its output and report back to the Trust. In response, the Director-General required senior programme executives across television, radio and editorial policy to explore .
BBC Gender Pay Gap eport 2019 2 Gender pay at the BBC The median gender pay gap for BBC Public Service Broadcasting has fallen again to 6.7%. The national median for 2018 is 17.9%. Our mean pay gap is 6.8%, down from 10.7% since 2017. We have achieved further reductions in the past year primarily through increasing the number of women in
rules which can be found in Part Three of the Ofcom Broadcasting Code (with the Cross-Promotion Code and the On Demand Programme Service rules). 4. The BBC Agreement is the Agreement dated November 2016 between Her Majesty’s Secretary of State for Culture, Media and Sport and the British Broadcasting Corporation as may be amended from time to .
Literary Theory and Schools of Criticism Introduction A very basic way of thinking about literary theory is that these ideas act as different lenses critics use to view and talk about art, literature, and even culture. These different lenses allow critics to consider works of art based on certain assumptions within that school of theory. The different lenses also allow critics to focus on .
